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Baron Small Cap Fund

Symbol BSFIXCUSIP: 068278803
Symbol BSFIXCUSIP: 068278803
S
Small-Cap Growth

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$39.27

Daily Change -$0.21 (-0.53%)
As of 12/12/2024

Net Assets

$4.52 B

As of 09/30/2024

Morningstar Rating™

As of 09/30/2024

Morningstar Medalist Rating™

medal Logo

SILVER

Inception date

09/30/1997

Prices & Performance

PricesAs of 12/12/2024

NAVDaily Change ($)Daily Change (%)MTDQTDYTD
$39.27-$0.21-0.53%-2.12%4.69%20.13%
NAV$39.27
Daily Change ($)-$0.21
Daily Change (%)-0.53%
MTD-2.12%
QTD4.69%
YTD20.13%

PerformanceAs of 09/30/2024

Portfolio or IndexQTD1YTD11 Year3 Years5 Years10 YearsSince Inception 09/30/1997
BSFIX - Baron Small Cap Fund - I9.68%14.74%29.25%1.75%12.41%11.16%10.44%
Russell 2000 Growth Index8.41%13.22%27.66%-0.35%8.82%8.95%6.44%
Russell 3000 Index6.23%20.63%35.19%10.29%15.26%12.83%8.86%

Performance InformationAs of 09/30/2024

Performance statistics3 Years5 Years10 Years
Standard Deviation (%)23.2124.3120.35
Sharpe Ratio-0.080.410.47
Alpha (%)2.223.982.78
Beta0.960.950.93
R-Squared (%)91.1188.6489.03
Tracking Error (%)6.988.286.91
Information Ratio0.300.430.32
Upside Capture (%)99.2698.1594.30
Downside Capture (%)92.9086.4683.98
Except for Standard Deviation and Sharpe Ratio, the performance based-characteristics above were calculated relative to the Baron Small Cap Fund's(BSFIX) benchmark (Russell 2000 Growth Index). Performance statistics for additional periods will be provided on request. Source FactSet: SPAR.

Risk & Return109/30/2019 - 09/30/2024

1 Source: FactSet SPAR.

Portfolio Holdings & Characteristics

HoldingsAs of 11/30/2024

HoldingSector% of Net Assets
Vertiv Holdings Co
Vertiv Holdings Co (VRT) is a pure-play full-service provider of digital-critical infrastructure solutions for the data center and communications end markets.
As the leader in critical infrastructure solutions for data centers, Vertiv is positioned to exceed end-market growth due to its strong competitive advantage, particularly in liquid cooling, which is essential for AI data centers given the increased energy density of the servers. We expect Vertiv to leverage its healthy contribution margins and strong execution to boost profits, driving robust free cash flow generation that will allow the company to deploy funds into share buybacks or M&A to create additional value.
Industrials7.6%
Gartner, Inc.
Gartner, Inc. (IT) is the leading independent provider of research and advisory services for IT, HR, sales, finance, and marketing leaders.
Gartner has a vast addressable market, which management estimates exceeds $70 billion annually, implying a penetration rate of less than 3%. IT is rapidly changing and growing in strategic importance, leading users to turn to third-party providers for insight into trends. Gartner enjoys retention rates of more than 100%, driven by the low price of its research relative to value. We think consistent execution in Global Technology Sales and improvements in Global Business Sales will help accelerate Research growth into the low double digits.
Information Technology5.4%
Guidewire Software, Inc.
Guidewire Software, Inc. (GWRE) is a leading provider of core systems software to the global P&C insurance industry.
Guidewire is a small player in a vast addressable market and has been benefiting from the inevitable need for P&C insurers to upgrade 30-year-old systems. The company offers best-in-class functionality, as evidenced by its growing installed base and near-100% retention rates. The company has passed the midpoint of its cloud transition, and we expect to see accelerating revenue, expanding margins, and improving FCF over the next several years. We believe that recent M&A in the vertical software space supports a meaningful value creation opportunity for shareholders.
Information Technology5.0%
Kinsale Capital Group, Inc.
Kinsale Capital Group, Inc. (KNSL) is a property and casualty insurer focused exclusively on the excess and surplus (E&S) lines market, which includes risks that are unique or difficult to place in the standard insurance market.
We believe Kinsale is a well-run insurer that should grow earnings and book value per share much faster than its peers. Its focus on the attractive E&S market, underwriting discipline, and efficient technology platform enable Kinsale to rapidly grow premiums while delivering industry-leading underwriting margins. Management is highly regarded and has decades of experience in the E&S market. We believe Kinsale has a long runway for growth in an attractive segment of the P&C insurance market.
Financials4.8%
Red Rock Resorts, Inc.
Red Rock Resorts, Inc. (RRR) owns and operates 20 local casinos in Las Vegas and is in the planning stages of developing and managing a tribal casino in California. It also controls seven gaming-entitled sites consisting of almost 600 acres in Las Vegas and 30 acres in Reno.
The company operates in the improving Las Vegas locals gaming market, which is now back to previous peak levels. We think the market is attractive, given favorable fundamentals including population growth 2.7 times the national average and $20 billion of development projects either in the planning stages or under development. The market also offers the lowest tax rate in the U.S., with limitations on the development of new casinos in the region. Red Rock also has the option to develop or sell its owned acreage.
Consumer Discretionary3.2%
The Baldwin Insurance Group, Inc.
The Baldwin Insurance Group, Inc. (BWIN) is an insurance brokerage firm that distributes commercial and personal lines insurance to over 2 million clients.
The Baldwin Insurance Group is gaining market share due to its entrepreneurial culture, unique client service offerings, and fast-growing distribution channels. The company is an active consolidator in the highly fragmented insurance brokerage industry. We expect margin expansion from lapping recent growth investments, leverage of corporate overhead, and high margins on acquisitions. 
Financials3.1%
ICON Plc
ICON Plc (ICLR) is the second largest global contract research organization (CRO), providing outsourced drug development services to pharmaceutical and biotechnology clients. ICON has expertise in multiple therapeutic areas.
ICON became the second largest CRO through its 2021 merger with PRA Health. As drug trials become increasingly complex and biopharma companies consolidate vendor lists among top-tier providers and seek stickier strategic relationships, we believe large global CROs will be the primary beneficiaries. ICON's scale benefits enhance relevance to existing and potential customers. The outsourcing trend is accelerating, driven by biopharma's need for a lower, more variable cost structure and the inherent lack of biotechnology infrastructure.
Health Care3.0%
Chart Industries, Inc.
Chart Industries, Inc. (GTLS) is a leader in cryogenic and compression technology and equipment for fluid processing and storage. Its products perform key functions in process and transportation/storage steps across clean energy (including hydrogen), liquified natural gas (LNG), and industrial industries.
In 2023, Chart closed its acquisition of Howden, a leader in compression technology, expanding Chart's product offering and exposure to clean energy markets while creating a more globally diversified, resilient company with a strong financial profile and continued double-digit growth opportunities. We think Chart is well positioned to benefit from growth in LNG, hydrogen, and other "nexus of clean" opportunities, where it leverages its existing products and application-specific IP to maintain leading market share. Robust cash flow should lead to rapid deleveraging.
Industrials2.8%
SiteOne Landscape Supply, Inc.
SiteOne Landscape Supply, Inc. (SITE) is the largest wholesale distributor of landscape supplies in North America. Through its large branch network, the company offers a broad selection of products across irrigation, agronomics, hardscapes, and nursery to landscaping professionals.
While SiteOne is more than five times the size of its closest competitor, it has only mid-teens share of a highly fragmented market. It has significant opportunity to further consolidate the industry through accretive acquisitions, driven by an experienced management team with a strong M&A track record. The core landscaping market generally grows faster than GDP over time and is relatively recession resilient. SiteOne is also investing in initiatives to increase the productivity of its sales force and in-store associates to expand margins over time.
Industrials2.8%
TransDigm Group Incorporated
Through its subsidiaries, TransDigm Group Incorporated (TDG) designs, produces, and supplies engineered aerospace components for commercial and military aircraft customers across the world.
TransDigm's parts are custom designed at the pre-production stage and approved by the Federal Aviation Administration and aircraft manufacturers. TransDigm is typically the sole supplier of 90% of the parts that it manufactures. While the company earns a modest return on original equipment parts, it earns large margins on after-market replacement parts for airframes that stay in service for decades, generating a substantial stream of recurring cash flow that it uses for acquisitions and shareholder dividends.
Industrials2.6%
Total
Total
40.3%
Top Ten Fund Holdings based on net assets. Portfolio holdings may change over time.
Portfolio holdings are subject to change. Current and future portfolio holdings are subject to risk.

Contributors / DetractorsQuarterly as of 09/30/2024

Top ContributorsAverage WeightContribution
Vertiv Holdings Co6.86%1.31%
Guidewire Software, Inc.4.06%1.29%
The Baldwin Insurance Group, Inc.3.01%1.06%
Kinsale Capital Group, Inc.4.57%0.86%
Gartner, Inc.5.50%0.70%
Source: FactSet PA.

GICS Sector BreakdownAs of 11/30/2024

Sector

Industrials

28.9%

Information Technology

23.6%

Consumer Discretionary

13.7%

Financials

11.9%

Health Care

8.8%

Communication Services

6.3%

Cash & Cash Equivalents

2.5%

Consumer Staples

2.3%

Materials

1.6%

Real Estate

0.4%

Sub-Industry

11/30/2024
Application Software12.70%
IT Consulting & Other Services9.10%
Electrical Components & Equipment7.60%
Industrial Machinery & Supplies & Components 6.40%
Property & Casualty Insurance4.80%
Casinos & Gaming4.00%
Aerospace & Defense3.90%
Life Sciences Tools & Services3.80%
Movies & Entertainment3.20%
Advertising3.10%
Insurance Brokers3.10%
Human Resource & Employment Services3.10%
Trading Companies & Distributors2.80%
Leisure Facilities2.60%
Restaurants2.10%
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Application Software12.70%
IT Consulting & Other Services9.10%
Electrical Components & Equipment7.60%
Industrial Machinery & Supplies & Components 6.40%
Property & Casualty Insurance4.80%
Casinos & Gaming4.00%
Aerospace & Defense3.90%
Life Sciences Tools & Services3.80%
Movies & Entertainment3.20%
Advertising3.10%
Insurance Brokers3.10%
Human Resource & Employment Services3.10%
Trading Companies & Distributors2.80%
Leisure Facilities2.60%
Restaurants2.10%
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Portfolio CharacteristicsAs of 09/30/2024

DescriptionBaron Small Cap FundRussell 2000 Growth Index
Inception DateSeptember 30, 1997
Net Assets$4.52 billion
# of Issuers / % of Net Assets57 / 98.3%
Turnover (3 Year Average)12.39%
Active Share96.3%
Median Market Cap$6.81 billion$1.21 billion
Weighted Average Market Cap$16.39 billion$4.18 billion
Expense Ratio1.05%
Current Expense Ratio Date9/30/2023
EPS Growth (3-5 year forecast)21.3%16.8%
Price/Earnings Ratio (trailing 12-month)35.921.8
Price/Book Ratio3.53.8
Price/Sales Ratio3.01.8
The Net Assets include all share classes combined.
Price/Book Ratio and Price/Sales Ratio are calculated using the Weighted Harmonic Average. Source: FactSet PA. Internal valuation metrics may differ.

Distributions

Record DateEx DatePayable DateIncomeReturn of CapitalShort-Term Capital GainLong-Term Capital GainTotalRe-Invest NAVCalendar-Year Return
12/06/202312/07/202312/08/2023$0.0000$0.0000$0.0000$0.9193$0.9193$30.3727.19%
12/07/202212/08/202212/09/2022$0.0000$0.0000$0.0000$1.4521$1.4521$27.57-31.05%
11/22/202111/23/202111/24/2021$0.0000$0.0000$0.0000$4.7182$4.7182$40.4915.84%
11/23/202011/24/202011/25/2020$0.0000$0.0000$0.0000$4.1153$4.1153$36.6840.68%
11/25/201911/26/201911/27/2019$0.0000$0.0000$0.0000$2.8191$2.8191$30.59
For estimated distributions, visit the Tax Center
Cliff Greenberg, SVP, Co-CIO and Portfolio Manager
Investor Series

Baron Small Cap Fund: A Differentiated Approach to Small Cap Investing

Learn more about the investment approach for Baron Small Cap Fund.